The new international framework of automatic exchange of tax information released by the Organisation for Economic Cooperation and Development (OECD) on Monday seems to have a lot of loopholes as far as India is concerned.
At first glance, the new system makes access to information much more easier compared to the current system of “upon request”, under which secrecy jurisdictions use their tough and non-transparent laws to block details on black money hoarders.
But critics have said that the framework has been designed to exclude countries including India when it comes to reaping the real benefits and the framework will not work without bilateral treaties to ratify the model.
Analysts Markus Meinzer and Andres Knobel at Tax Justice Network (TJN), a Europe-based advocacy group, have said that the standard “leaves enough room for tax havens to arbitrarily exclude countries like India” by refusing to sign treaties with them. “Given the steep rise in emerging market assets under management of western banks, this appears to be a devious strategy to exclude developing countries from benefiting from the standard” Knobel told HT.
Also, many non-OECD countries will find it expensive to develop the capacity to provide information.
OECD, however, denied that the system has been developed to suit rich countries. “India, like all G20 countries has committed to automatic exchange of information and will implement shortly,” Pascal Saint Amans, director, Centre for Tax Policy and Administration at OECD, told HT.